The Monetary Conduct Authority’s (FCA) Open Finance roadmap, launched in April 2026, is supposed to be a serious step towards a extra data-driven monetary system. Constructing on the foundations of Open Banking (OB), the initiative goals to increase information sharing past present accounts to a wider vary of monetary merchandise, together with lending, financial savings and mortgages.
The premise is straightforward: permitting monetary information to maneuver extra freely can speed up decision-making for lenders, in addition to the supply of providers. For companies, this might enhance their capacity to safe finance, notably for people who have struggled to entry credit score up to now or these with out a longtime borrowing historical past. On paper, the FCA’s roadmap stands to scale back one of many trade’s long-standing obstacles and encourage fairer competitors amongst gamers.
However for a lot of SMEs, the problem is sustaining constant liquidity. The hole between credit score approval and the supply of usable funds stays the persistent situation. Companies face monetary pressures in actual time and, whereas Open Finance could enhance how lending choices are made, the FCA has but to handle how shortly funds attain retailers’ accounts.
Authorized finance doesn’t translate to rapid liquidity
The present monetary panorama highlights a disconnect within the FCA’s Open Finance plans. Whereas securing funding is a precedence, the pace at which companies can entry liquidity stays a difficulty.
A enterprise could also be anticipating incoming funds but nonetheless be unable to fulfill payroll, pay suppliers, or settle tax liabilities on time. The problem just isn’t at all times whether or not cash might be paid into retailers’ accounts, however when it turns into accessible to cowl day-to-day monetary pressures.
Late funds irritate this problem. UK SMEs are owed tens of billions of kilos in unpaid invoices and round 90% of corporations report having skilled late funds over the previous 12 months, with almost half reporting that delays have gotten extra frequent. On common, funds arrive over 30 days previous agreed phrases, protecting very important working capital locked away for weeks past expectations.
The reason for late funds can also be shifting. What was as soon as pushed by inefficiency is now more and more structural. In lots of instances, it displays stress inside provide chains, the place money is both unavailable or intentionally held again elsewhere within the community.
The impact goes past particular person corporations. Throughout the broader economic system, late funds price an estimated £11bn every year and contribute to 1000’s of enterprise closures. Smaller corporations are inclined to really feel the affect most; with tighter money reserves and fewer room to soak up delays, they’re extra uncovered when funds don’t arrive on time.
The system makes choices quicker than it strikes cash
Over the previous decade, fintech innovation has remodeled how monetary choices are made. What used to take days can now occur a lot quicker, however this acceleration in decision-making has not been matched by an identical shift in how funds are processed and settled post-transaction.
In the present day’s fee ecosystem operates on a hybrid of legacy and trendy infrastructure. Whereas some rails allow near-instant transfers, others similar to Bacs nonetheless function on three-day cycles, creating irregular fund availability.
To know the hole, it helps to have a look at how funds truly transfer throughout the ecosystem. Each transaction goes via two phases: clearing and settlement. Clearing validates and routes the fee instruction, whereas settlement is the purpose at which funds are transferred. Most of the time, it’s the separation between the steps that introduces the delay, reflecting a structural characteristic of how the broader funds ecosystem is at present structured.
Primarily, funds stay in transit till settlement is full. For SMEs, that creates a well-known drawback. Whereas choices may be made quickly, their execution is likely to be delayed by constraints inside processing cycles, intermediaries and settlement home windows. Money leads to limbo; seen on the books, however not but accessible to be used.
Rising demand for immediate funds factors to the necessity for higher money movement oversight and real-time entry to funds. The subsequent part of fintech is not going to be about launching extra merchandise, however about enhancing present infrastructure so cash arrives when companies really need it.
The way forward for Open Finance should deal with money availability
In the end, Open Finance might be judged on whether or not it improves how companies get entry to finance, not simply how a lot information is out there.
Whereas the FCA’s plan is a constructive step towards an built-in, data-centric monetary ecosystem, fast approvals alone don’t assure that SMEs may have well timed entry to operational funds or improved money movement administration.
Narrowing this hole is now a shared duty throughout the complete fee ecosystem. As real-time fee rails, enhanced settlement protocols and trendy infrastructure proceed to evolve, the main focus should shift from merely approving funds to making sure they’re delivered and accessible to be used immediately.
Till funding approval and liquidity transfer on the identical tempo, the hole SMEs face will stay: solely the method round it’ll get quicker.
Mark Andreev, COO at Precisely.com
“Why the FCA’s Open Finance roadmap gained’t repair SME finance if money movement lags behind” was initially created and printed by Digital Funds Worldwide, a GlobalData owned model.
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